Horizon hangs on, chief sees better

Charlie Conoley, a veteran Gulf Coast community banker at the helm of Bradenton-based Horizon Bank, has had better weeks than the one that began Nov. 17.

First, the bank's publicly traded parent company, Horizon Bancorporation, posted a nine-month loss of $6.6 million, or $3.71 per share for the first three quarters of 2009. The bank posted a net income of $711,000 in the first three quarters of 2008.

The nine-month loss overshadowed one positive aspect of the bank's quarterly filing with the Securities and Exchange Commission: It actually posted a profit for the third quarter — $161,664, or 9 cents per share.

Then, the day after that quarterly report, the bank disclosed that it had been working for several weeks under a regulatory enforcement letter to raise capital and lower its level of non-performing loans. That order, an agreement between Horizon and the Federal Reserve Bank of Atlanta and the Florida Office of Financial Regulation, puts the bank in plenty of company, as most Gulf Coast community banks around during the boom have attracted some type of regulatory scrutiny.

In its filing with the SEC, Horizon says it has already set aside $8.8 million for loan losses in the first nine months of 2009, compared to $360,000 in the prior year. Still, even with such a large write-down, the problems aren't going to go away “overnight,” Conoley tells Coffee Talk.

“It's going to take a while to write down all these loans,” says Conoley, “and even longer to raise the capital.”

On the capital end, Conoley points to $500,000 the bank has already raised through a private stock offering as a good sign. Conoley adds that the money is from “friends and believers” in the bank, not board members, a group he plans to seek capital from in the near future.

Meanwhile, Conoley says despite the documented problems, he thinks Horizon will be in a good spot competitively after it survives the industry carnage. Gone, he says, will be the glut of banks that put pressure on what Horizon could charge for loans and interest rates.

“We will be down to just a few community banks in Bradenton and another few in Sarasota,” says Conoley. “I like our chances going forward.”